I recently had an opportunity to sit down with Lyle Fong, the CEO of Lithium. Lithium recently partnered with Omniture to provide a holistic view of user behavior on social networks. This post is the second in a three-part series.
Chris: What is the most important aspect that enterprises should be thinking about with regard to social media?
Lyle: What social media really boils down to is breaking down some of the old walls that companies had created and engaging with customers online. The statistics show that customers are already online, looking for a place to voice their opinion. Companies need to embrace that fact and change the way they think about marketing. Instead of lobbing press releases and traditional corporate messages to customers, it’s now about listening to them and giving them a voice. Identifying the best customers and understanding where they are online is a key part of social media strategy for any business. Fundamentally, there is a cultural shift that must occur for companies to actually start engaging in dialogue with these customers so it’s a real two-way conversation. That’s why some companies have had a harder time with this concept.
Chris: I like the notion of engaging in a dialogue with the customer rather than creating a one-way “spew” of information. Social media really brings about the concept of “accelerated Darwinism.” Given the frenetic pace of our online ecosystem and the ability of anyone to now explore the competition, brands can literally be transitioned at the click of a button. Companies now need to have a heightened focus with regard to customer engagement. What are you seeing with regard to customer engagement?
Lyle: You’re exactly right. Consumers today are growing more distrustful of larger institutions.
Consumers are now looking to their peers to tell them what they should buy. For example, people buy laptops based on what their peers recommend. They are actually more willing to trust them than even an expert from PC World. The challenge is that this information is now out there and is now accessible to everyone. This levels the playing field and creates an opportunity for smaller companies.
The cause of this shift is that people are looking for others with similar interests . They are out there talking about what they like and don’t like. If the company doesn’t have a community, they join another one. They believe their peers and switch brands and products.
A good example of this is with AT&T wireless (one of our customers). They found that one woman spends 7–8 hours a day helping others by answering questions about the best rate plans, phones to purchase, and more. Recently she achieved the highest level status on the community. The funny thing is, she is not even an AT&T Customer! Because she built up a reputation on the AT&T site, she is now counting down the days until her contract with the competition is up so she can switch to AT&T. This same thing is happening with several large companies like Cisco.
Chris: Interesting. Can you describe how this concept of a “social pecking order” works within these communities?
Lyle: This is the fundamental thing that Lithium does best. We have identified over the years that the way you build successful, vibrant communities is not necessarily by catering to the “masses.” Rather, cater to the hard-core users. These can be your evangelists– the users that influence others to use your products. The big problem is that many companies don’t know who these people are. Our approach to social media was heavily influenced by the online gaming industry. We actually built our software as if it were a game such as “World of Warcraft” or “Quake.” The same reasons why people play these games for hours and hours a day can be applied to enterprise software communities.
For example, the concept of online reputation can be a powerful catalyst for creating active participation within a community. We track over 100 different metrics for any given users. For example, the number of posts, page views, how long they visit the site, what people think of them, etc.
We build for our customers a ranking system that is hierarchical, not linear. It takes all of these metrics into account to build reputation. In the case of the woman on AT&T, when she started in the community she was a “newbie” and her name was in black like most of the other community members. As she built her reputation by helping other users, her name changed to red, then appeared in bold, then had an icon next to it. With each of these reputation “upgrades,” she received more privileges, was invited to give beta feedback, got access to exclusive parts of the site, and more.
This ranking is power and status within the community. She might have a normal job like anyone else, but when she goes on this community, she is revered by her peers. Community members look up to her and ask her specific questions. In an online community, everyone starts out equal. It doesn’t matter if you are a CEO or a high-school student. The only thing that sets people apart is the reputation they have earned and the content they provide. Now that you can identify these super-users, you can reward them and give them incentives so they will stay. By building up a base of super users that will help evangelize your brand, you tap into an extremely motivated group of people that will do much of the marketing for you.
Tomorrow: Super Users, and how they can help drive customer loyalty…